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A New Deal Fights the Depression

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A New Deal Fights the Depression 488-494-Chapter 15 10/21/02 5:26 PM Page 488 A New Deal Fights the Depression MAIN IDEA WHY IT MATTERS NOW Terms & Names After becoming president, Americans still benefit from •Franklin Delano •Civilian Conser- Franklin Delano Roosevelt programs begun in the New Roosevelt vation Corps (CCC) used government programs Deal, such as bank and stock •New Deal •National Industrial to combat the Depression. market regulations and the •Glass-Steagall Act Recovery Act Tennessee Valley Authority. •Federal Securities (NIRA) Act •deficit spending •Agricultural Adjust- •Huey Long ment Act (AAA) One American's Story Hank Oettinger was working as a printing press operator in a small town in Wisconsin when the Great Depression began. He lost his job in 1931 and was unemployed for the next two years. In 1933, however, President Roosevelt began creating work programs. Through one of these pro- grams, the Civil Works Administration (CWA), Oettinger went back to work in 1933. As he later recalled, the CWA was cause for great celebration in his town. A PERSONAL VOICE HANK OETTINGER “ I can remember the first week of the CWA checks. It was on a Friday. That night everybody had gotten his check. The first check a lot of them had in three years. I never saw such a change of attitude. Instead of walking around feeling dreary and looking sorrowful, everybody was joyous. Like a feast day. They were toasting each other. They had money in their pockets for the first time.” M —quoted in Hard Times Civil Works Administration Programs like the CWA raised the hopes of the American people and sparked workers prepare great enthusiasm for the new president. To many Americans, it appeared as if the for a parade for country had turned a corner and was beginning to emerge from the nightmare of workers in San the Great Depression. Francisco in 1934. Americans Get a New Deal The 1932 presidential election showed that Americans were clearly ready for a change. Because of the depression, people were suffering from a lack of work, food, and hope. 488 CHAPTER 15 488-494-Chapter 15 10/21/02 5:26 PM Page 489 ELECTING FRANKLIN DELANO ROOSEVELT Although the Republicans renom- inated President Hoover as their candidate, they recognized he had little chance of winning. Too many Americans blamed Hoover for doing too little about the depression and wanted a new president. The Democrats pinned their hopes on Franklin Delano Roosevelt, known popularly as FDR, the two-term governor of New York and a distant cousin of former president Theodore Roosevelt. As governor, FDR had proved to be an effective, reform-minded leader, work- ing to combat the problems of unemployment and poverty. Unlike Hoover, Roosevelt possessed a “can-do” attitude and projected an air of friendliness and confidence that attracted voters. Indeed, Roosevelt won an overwhelming victory, capturing nearly 23 million votes to Hoover’s nearly 16 million. In the Senate, Democrats claimed a nearly two-thirds majority. In the House, they won almost three-fourths of the seats, their greatest victory since before the Civil War. WAITING FOR ROOSEVELT TO TAKE OVER Four months would elapse between Roosevelt’s victory in the November election and his inauguration as president in March 1933. The 20th Amendment, which moved presidential inaugurations to January, was not ratified until February 1933 and did not apply to the 1932 election. KEY PLAYYEERSS FDR was not idle during this waiting period, however. He worked with his team of care- fully picked advisers—a select group of professors, lawyers, and journalists that came to be known as the “Brain Trust.” Roosevelt began to formulate a set of policies for his new administration. This program, designed to alleviate the prob- lems of the Great Depression, became known as the New FRANKLIN D. ROOSEVELT ELEANOR ROOSEVELT Deal, a phrase taken from a 1882–1945 1884–1962 campaign speech in which Born into an old, wealthy New A niece of Theodore Roosevelt Roosevelt had promised “a new York family, Franklin Delano and a distant cousin of her deal for the American people.” Roosevelt entered politics as husband, Franklin, Eleanor a state senator in 1910 and Roosevelt lost her parents at New Deal policies focused on later became assistant secre- an early age. She was raised MAIN IDEA three general goals: relief for the tary of the navy. In 1921, he by a strict grandmother. Summarizing needy, economic recovery, and was stricken with polio and As first lady, she often urged A What plans financial reform. A became partially paralyzed the president to take stands did Roosevelt from the waist down. He on controversial issues. A pop- make in the four THE HUNDRED DAYS On tak- struggled to regain the use of ular public speaker, Eleanor months while he ing office, the Roosevelt admin- his legs, and he eventually was particularly interested in waited to take istration launched a period of learned to stand with the help child welfare, housing reform, office? intense activity known as the of leg braces. and equal rights for women A. Answer He Roosevelt became governor and minorities. In presenting a Hundred Days, lasting from began to formu- of New York in 1928, and booklet on human rights to the late a set of March 9 to June 16, 1933. because he “would not allow United Nations in 1958, she policies to alle- During this period, Congress bodily disability to defeat his said, “Where, after all, do viate the prob- passed more than 15 major will,” he went on to the White human rights begin? . [In] lems of the pieces of New Deal legislation. House in 1933. Always inter- the world of the individual per- Depression. These laws, and others that fol- ested in people, Roosevelt son: the neighborhood . the gained greater compassion school . the factory, farm or lowed, significantly expanded for others as a result of his office where he works.” the federal government’s role in own physical disability. the nation’s economy. The New Deal 489 488-494-Chapter 15 10/21/02 5:26 PM Page 490 Roosevelt’s first step as president was to carry out reforms in banking and finance. By 1933, widespread bank failures had caused most Americans to lose faith in the banking system. On March 5, one day after taking office, Roosevelt declared a bank holiday and closed all banks to prevent further withdrawals. He persuaded Congress to pass the Emergency Banking Relief Act, which authorized the Treasury Department to inspect the country’s banks. Those that were sound could reopen at once; those that were insolvent—unable to pay their debts— would remain closed. Those that needed help could receive loans. This measure revived public confidence in banks, since customers now had greater faith that the open banks were in good financial shape. AN IMPORTANT FIRESIDE CHAT On March 12, the day before the first banks were to reopen, President Roosevelt gave the first of his many fireside chats— “ The only thing radio talks about issues of public concern, explaining in clear, simple lan- we have to fear guage his New Deal measures. These informal talks made Americans feel as if the president were talking directly to them. In his first chat, President is fear itself.” Roosevelt explained why the nation’s welfare depended on public sup- FRANKLIN DELANO ROOSEVELT port of the government and the banking system. “We have provided the machinery to restore our financial system,” he said, “and it is up to you to sup- port and make it work.” He explained the banking system to listeners. A PERSONAL VOICE FRANKLIN DELANO ROOSEVELT “ When you deposit money in a bank the bank does not put the money into a safe deposit vault. It invests your money. A comparatively small part of the money that you put into the bank is kept in currency—an amount which in normal times Franklin D. is wholly sufficient to cover the cash needs of the average citizen.” Roosevelt holds his dog Fala and The president then explained that when too many people demanded their sav- MAIN IDEA talks to a young ings in cash, banks would fail. This was not because banks were weak but because Evaluating family friend. even strong banks could not meet such heavy demands. Over the next few weeks, Leadership M many Americans returned their savings to banks. B B How successful was REGULATING BANKING AND FINANCE Congress took FDR’s fireside another step to reorganize the banking system by pass- chat? ing the Glass-Steagall Act of 1933, which established B. Answer the Federal Deposit Insurance Corporation (FDIC). The It was very successful. FDIC provided federal insurance for individual bank Many Americans accounts of up to $5,000, reassuring millions of bank returned their customers that their money was safe. It also required savings to banks to act cautiously with their customers’ money. banks, showing increased Congress and the president also worked to regulate the confidence in stock market, in which people had lost faith because of the the banking crash of 1929. The Federal Securities Act, passed in May sysem. 1933, required corporations to provide complete informa- tion on all stock offerings and made them liable for any misrepresentations. In June of 1934, Congress created the Securities and Exchange Commission (SEC) to regulate the stock market. One goal of this commission was to prevent people with inside information about companies from “rigging” the stock market for their own profit. In addition, Roosevelt persuaded Congress to approve a bill allowing the manufacture and sale of some alco- holic beverages. The bill’s main purpose was to raise gov- ernment revenues by taxing alcohol.
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